“Apple will trim production of its iPhone family around 10% on the year in the first quarter of 2017, according to calculations by The Nikkei based on data from suppliers,” Nikkei reports.
“This comes after the company slashed output in January-March 2016 due to accumulated inventory of the iPhone 6s line at the end of 2015. That experience led Apple to curb production of the iPhone 7, introduced in September, by around 20%,” Nikkei reports. “But the phones still have sold more sluggishly than expected.”
MacDailyNews Take: Zero proof that the iPhone 7/Plus “have sold more sluggishly than expected” proffered by Nikkei, as usual.
“The larger iPhone 7 Plus, which features two cameras on its back face, remains popular. But a shortage of camera sensors has curbed Apple’s ability to meet demand for the phones. U.S. research company IDC forecasts global smartphone shipments in 2016 on par with the 2015 level,” Nikkei reports. “Even Apple has had difficulty creating appealing new features, stifling demand from customers who otherwise would look to upgrade to the latest device.”
Read more in the full article here.
MacDailyNews Take: In what has become the Nikkei‘s annual shocker: Apple is decreasing production in the quarter after Christmas. Cue the horror!
Everything in this Nikkei article is conjecture, estimates, and FUD.
This report (as with many of Nikkei‘s Apple-related reports) smacks of a plant designed to depress the price of AAPL. Plain and simple. And Nikkei seems to be the preferred place to do it.
Those who fail to learn from history are doomed to lose money in the stock market. History lesson below.
Nikkei proclaims ‘iPhone 7’ Dead On Arrival; bemoans Apple’s ‘lack of innovation’ – May 12, 2016
Japan’s Nikkei, The Wall Street Journal blow it, get iPhone demand story all wrong – January 16, 2013
Did Apple reduce 4-inch Retina display orders due to improving yields? – January 15, 2013
Analysts: iPhone 5 demand ‘robust;’ ignore the non-news noise – January 15, 2013
Apple iPhone suppliers decline on report orders cut by 50% – January 15, 2013
Apple swoon erases $17 billion from stock market – January 14, 2013
Apple iPhone 5 production cut signaling a new product release? – January 14, 2013
Apple drops to 11-month low on old reports of component cuts – January 14, 2013
The strange math of Apple’s alleged massive iPhone 5 component cuts – January 14, 2013
UBS analysts: Apple iPhone component order reduction ‘old news’ – January 14, 2013
Apple pulls down U.S. futures – January 14, 2013
Apple shares drop below $500 after reported cuts in iPhone 5 parts orders – January 14, 2013
“Nikkei” nonsense arrives on cue prior to earnings in an attempt to drive AAPL down, nothing more or less!
I’m not saying the report is true but we can see how even rumours of things about the iPhone can affect Apple’s stock price.
One reason why aapl is so low (if it had the PE of Google/alphablet the stock would be over 300 now instead of languishing at 100 or so. ) is that big investors refuse to buy as they say it’s a DANGEROUS ONE PRODUCT IPHONE company.
(they quote Samsung Electronics 90% drop in profits due to the Note recall).
Apple’s PE is a ridiculous HALF the AVERAGE of the S&P !
That is why I’ve always said that Apple should work hard to keep it’s other products like Mac alive instead of neglecting them so that they have a diversified product line. (Macs by the way make more money than iPad and more than TWICE the entire ‘other product’ category that includes Watch, iPod, accessories, Apple TV etc )
Since Tim Cook has spent nearly 100 BILLION on stock buybacks and dividends to boost the stock people who argue that Apple should ‘save resources’ and not spend on (billions earning Mac) are crazy.
(Msft btw has shipped 300-400 million Win 10 units and say that they are aiming for 1 billion. Mac has 10% market share. Apple should be going gangbusters on Mac as iPad sales have fallen to HALF peak. GO COUNT THE NUMBER OF IMAC ADVERTISEMENTS YOU’VE SEEN IN THE LAST FEW YEARS –including CHEAP Web ads –vs say Apple WATCH ads and you can see the Mac neglect. Not only is supporting Mac good for consumers it’s good for the stock).
I would agree that ‘new’ news does affect AAPL but do you really think the now practically annual Nikkei report of lowered iPhone production at the start of the year will affect AAPL to the degree it has in the past? Like the boy crying wolf those that have heard it (most everyone) will tend to ignore it or take it with a grain of salt.
apple stock is ALREADY so LOW (with the cash reserves it has the stock is silly cheap) of course it can’t fall much … point is WITHOUT A DIVERSIFIED PRODUCT LINE can it go UP much ?
every blockbuster quarter is disregarded as the big investors (the guys who actually push the stock up or down) say ‘one product is dangerous’.
btw: my first line was that “I’m not saying the report is true” see the ‘NOT’? your ‘everyone tend to ignore it’ … so are they ignoring it? so if they are really ignoring reports like this — and the litany of others through the year — why isn’t the PE matching — i’m not even saying ‘exceeding’ just matching — Google’s and aapl is like TRIPLE its price now?
I apologize for commenting only on your ‘rumors’ about the iPhone portion of your post. I never said it won’t affect the stock, just not as much as in the past.
I agree that Apple does need to look at a more diversified product portfolio. Or at least put just as much effort into non-iPhone connected products, That iPhone is becoming too much of a crutch for them IMO. Big investors many times have the experience to back their fear of a single product being dangerous, but if you notice Google and Amazon really do only have ‘one’ main product, Advertising and Retail specifically but the difference with Apple’s iPhone is the pervasiveness into the culture. iPhone is very easily replaced should Apple disappear tomorrow as they have a smaller addressable market of users. This fear of easily being replaced would I think also explain why the PE would be lower. I would also agree that negative news does exacerbate the situation.
In response to Apple going “gangbusters” on the Mac, it may not amount to as much as you would imagine if they don’t match their pricing to meet the wallets of potential consumers.
(no need to apologize. always willing to hear reasoned arguments. I get overly excited over ‘Mac’! )
I can agree with much you say.
as for mac, for hardware it makes the most next to iPhone.
The ‘Services’ category all makes more as well but that’s a big ‘catch all’ group that even includes huge revenues from Warranties like Mac Apple Care and Mac App store etc.
I whole hearted agree with pushing new stuff like Watch, Airpods, Apple pencils etc but for now they like I mentioned make much less than Mac. Not upgrading or not even advertising popular items like iMac (when I read MDN — because of my search or comment history i suppose– I get Dell and Acer ads — apple isn’t even advertising Macs though cheap web ads to me! ) is a waste when you think like I said T.C has spent near 100 billion on buybacks and dividends to boost the stock.
Utter nonsense. Apple have never kept production at full throttle throughout each iPhone cycle. A 10% cutback in manufacturing after a stellar launch is to be expected and completely normal.
Tim Cook should respond to this rumor ASAP to prevent further stock losses.
Tim Cook CANNOT respond to this rumor as Apple is in the “quiet period” with the upcoming earnings report. But wait till the earnings come out, that will be the answer. And Apple stock dropped less than most tech companies on Friday, so nothing to worry about. Just ignore the noise, the earnings will answer the questions positively or negatively.
Of course Apple will reduce production after holiday season….. this is making sometging out of nothing …vulgar manipulation.
Nikkei can go F itself…. it seems like is becoming a ritual for them…. and i feel bad for those who fall for their FUD.
WTF. First you write that Apple reduces production post holidays then castigate Nikkei for reporting the same thing that you wrote. Are you a complete idiot?
What Nikkei doesn’t report is that nearly all manufacturers in nearly every industry reduce production in the post-Christmas holiday due to certain-to-come reduced demand. Their article wouldn’t be so objectionable if they would prominently include this fact.
I meant to say post-Christmas holiday quarter….
Apple has a huge underground storage depot beneath the Mother Ship for all those iPhones, Apple Watches, and other products bound to collect dust. It’s a vast array of shelves designed by Tim Cook himself.
I honestly don’t understand why Apple can’t keep its desktop line refreshed at least every couple of years when automobile companies can do that much every year. Why is it so difficult for Apple to upgrade a desktop. A company like NVIDIA can upgrade GPUs every year. Intel Corp. can pretty much do the same with CPUs. Is Apple going to place the blame on component suppliers for lack of desktop upgrades. Is it that Apple CAN’T afford to upgrade its desktops with newer components or they just don’t want to bother with doing so? I’m beginning to think Apple is only chasing after profits with the iPhone and doesn’t think desktops are important to the company in terms of revenue. I would think that upgrading desktops wouldn’t be all that difficult to do and wouldn’t require much effort on Apple’s part.
It appears Apple is content to keep the iPhone Company moniker which is just stupid to me. Why do that when it can afford to do much, much more. What’s the point of all those R&D centers Apple is supposedly building. A five product line-up shouldn’t need all that much R&D.
The iPhone in some ways has become a crutch for Apple and it seems the majority of energy and resources Apple chooses to expend either focus on nice buildings or the iPhone line. Apple’s future may depend on how far management is thinking past the iPhone.
So Apple sold about 56 million iPhone 6s/6s Plus models, and 19 million other models in the December 2015 quarter. Last year Nikkei reported Apple was going to cut production by 30%. 30% of 56 million is 39 million.
Apple sold about 51 million iPhones for the March 2016 quarter. Looking at usage numbers it appears around 32 million iPhone 6s/6s Plus units were activated during that quarter. This is a greater cut than the Nikkei report, but if the 30% reduction is calculated using the 75 million iPhones sold in the December quarter then the reduction is more in-line: 51 million sold in the March 2016 quarter is 32% less than the 75 million sold in the December 2015 quarter.
Fast forward to now, and the Nikkei is reporting a 10% planned reduction. According to my calculations, Apple sold about 105 million iPhones for the December 2016 quarter. 10% less than this would be about 95 million. 95 million is much more than the 51 million sold in the March 2016 quarter.
What if my estimate is completely off and Apple sells 78 million during the December 2016 quarter as some analysts have suggested? 10% less than 78 million is 70 million, which MUCH higher than the 51 million sold in the March quarter last year.
This Nikkei report is very positive news.
Actually, I would not be surprised if the numbers are down. I don’t want that, especially as a share holder, but I have lost all faith in Tim Cook and his leadership. I want him GONE!
Vote if you agree.
I have a feeling we will re-visit this thread after the earnings call. I dont think the lower sales was due to lack on demand, I think it will be because of lack of inventory when the demand was high and Tim missed the boat again. About the only thing Apple has going for it,, is the Samsung phone fiasco that should have gained customers and sales. So we’ll see.
The iPhone is likely to become more like iPad as improvements become more incremental and users find it harder to justify the cost of a new model. People will hang on to their phones for longer, especially where they are no longer subsidised by the carriers.
Although there are technical and security differences between iOS and Android, you can use either equally well for almost all functions. Apart from exploding Samsungs there is no great benefit to be had from moving from Android to iOS – and Europeans, in particular, have long felt the extra cost of the iPhone was difficult to justify.
Amongst Apple diehards, Apple-fatigue is setting in as Apple ignores the Mac and its core apps. Many of us swore we would never have any Microsoft software on our pure Apple Macs but have been forced to deploy MS Office and onedrive after Apple dumbed down and then more or less abandoned its iWork package.
If you are not using a Mac then who cares about Apple’s ecosystem? In any case that ecosystem is withering away as Apple abandons other components such as The Airport range.
Apple’s best days are behind them. And now that the iPhone juggernaut is slowing Apple seem unable to innovate the way they did when Steve was in charge. The Watch is a case in point – Apple really thought that their boxy hardly-functional timepiece was going to drive a push into the mega profit luxury market. The hubris they demonstrated with the gold watch said a lot about the post-Jobs company. Well the gold watch is no longer and Apple now seem to have abandoned their pursuit of the luxury market…
… as they seem to abandon everything else they try.
Smartphones are ubiquitous now. They are no longer a status symbol. That might be a good thing. Perhaps people will start talking to each other again.
And in related news, how much is Samsung cutting back?
Q1 77M iPhones
Q2 70M iPhones
Sounds like a normal year to me.